From 29 July 2022, the Financial Conduct Authority (FCA) will start regulating the pre-paid funeral plan sector. Anyone that intends to continue providing, or selling, pre-paid funeral plans from this date must apply now, without delay, to the FCA for authorisation or (where appropriate) submit a notification to become an appointed representative.
The FCA’s application gateway opened on 1 September 2021. Applicants should note that the FCA will increase the application fee for authorisation by 40% for applications made from 1 November 2021.
The later applicants submit their application to the FCA for authorisation, the higher the risk is that they won’t be authorised by 29 July 2022. This means that – by no later than 28 July 2022 – they will need to stop selling and administering funeral plans, and either wind down their operations and/or transfer their existing funeral plans to another provider that has the required authorisations from the FCA.
All firms in the pre-paid funeral sector need to consider how their businesses, and business models, will be impacted by the FCA’s new rules, which apply from 29 July 2022. For example, there will be a ban on cold-calling, and a ban on commission payments to intermediaries.
We would urge firms active in this sector to seek advice, sooner rather than later, on the regulatory implications, including what it means to be FCA-authorised or an appointed representative (and the process to follow in each case), or whether a corporate restructuring is more appropriate in the circumstances.
Continuing to provide, or sell, pre-paid funeral plans from 29 July 2022 without appropriate FCA authorisation is a criminal offence.
If you have any questions about this, please get in touch with our Financial Services Regulation team.
About the author(s)
Kam is a London-based principal associate at Gowling WLG. Kam is also a member of the firm's Tech sector team, actively engaged in the technology sector as a whole. She advises on funds and financial services regulation.
Kam Dhillon
Kam is a London-based principal associate at Gowling WLG. Kam is also a member of the firm's Tech sector team, actively engaged in the technology sector as a whole. She advises on funds and financial services regulation.